I have checked all my 1099-Rs and they are all correct. I have gotten a tax transcript. It raises more questions since all dividends and brokerage info was downloaded into TurboTax, IRS wants to change those numbers. I was just told finally by the 7th IRS agent, yes I have spoken to 7 IRS agents in the last two days that no one can answer my question but someone at the processing center and they only work via letters and I should hear an answer in 30 days. I really doubt it. Here is the letter I sent to the KC processing center:
INTERNAL REVENU SERVICE
KCSC
Kansas City, MO 64999
2019 Federal Income Tax and the IRS Response
Dear IRS:
In late March 2020, using TurboTax I completed my federal and state 2019 tax documents. These documents were sent via certified US Mail with return receipts. My state income tax refund was deposited into my checking account about 6 weeks later. By July 14, 2020, the federal tax filing deadline, I had not received a return receipt, had not seen that my certified letter was delivered on the US Mail website, had not seen that the IRS was processing my refund and no money was deposited into my checking account by the IRS, I assumed my return was lost and re-filed my federal income tax.
The problem is that when I re-filed my federal income tax documents on July 14, 2020, I noticed that I had included a duplicate 1099-R in my first return. Consequently, I removed the duplicate 1099-R and sent my federal tax return again via certified mail with a return receipt. The new refund amount was $1012 more than the amount on the return I had sent in late March 2020.
About a week after I sent off my second federal tax return, I noticed that the IRS had deposited what I thought was the correct amount, based on my 1st return, into my checking account, and a week or two after that, I got the return receipt from the first certified letter.
PROBLEM
On March 22, 2021, I received a CP21B letter from the IRS noting that my refund amount was reduced by $297 and the decrease in credit for tax withheld was $2435. The problem is that the duplicate 1099-R stated the federal income tax withholding was $2138.28, and I didn’t change anything else on my return that was sent to the IRS in late March 2020. The difference between 2435 and 2138.28 is $297, the amount that my refund was reduced. I have checked all my 1099-R again to see if they were entered correctly into TurboTax and they were.
I have called the IRS 4 times and the Taxpayer Advocate 2 times and no one can answer that question of why my federal income tax withholding was reduced by $297. I have gotten my federal income tax transcript for 2019 and there are other inconsistencies related to dividends and capital gains. I am wondering why these changes in dividends and capital have only come to light after I requested a taxpayer transcript while trying to find out why the extra $297 was taken out of my refund. Were these errors clear when I thought I got my total expected refund in July 2020 based on my 1st return? Why did the IRS not reduce my expected refund in July 2020 because of these errors? All dividends and brokerage transactions were downloaded from the brokerage company into TurboTax.
The last IRS person I spoke to could not answer these questions and told me that the IRS would get back to me within 30 days. Given the IRS's past response to my 2019 tax return, I will be surprised if I get an answer to my questions from the IRS in 30 days. This letter is in response to a letter sent to me on 2021-08-26 asking for information.
Sincerely,
